Kimly to raise $40.4m in Singapore's first kopi-o IPO

SINGAPORE - Kimly Ltd launched its initial public offering on Wednesday (March 8) as it gears up to become the first traditional coffee shop operator listed in Singapore.

The IPO, first revealed by The Straits Times last month, is putting forth 173.8 million new shares at 25 cents apiece, with 3.8 million shares available for the public. The deal will put Kimly's market cap size at about S$288.7 million.

The offer will close at 12 noon on March 16, and trading is expected to start on March 20.

With nearly 500 stalls in 64 outlets across the country, Kimly is known to the public as one of the main operators of heartland "kopitiam" offering affordable food and beverage.

In a media briefing on Wednesday (March 8), Kimly executive director Vincent Chia said the business is highly resilient, with strong cash flow from operations and robust earnings growth.

Its revenue has enjoyed a compound annual growth of 7.6 per cent, from 2014's S$148.9 million to S$172.2 million last year.

This led to earnings growth of 9.9 per cent on compound annual rate, to S$24.2 million last year. Cash flow from operating activities has been steady, from S$21.8 million in 2014 to S$28.4 million in 2016.

Mr Chia said the net listing proceeds of S$40.4 million will be used mainly for acquisition and joint ventures, as Kimly continues to eye opportunities to expand its in-house offerings.

Under its food retail division, Kimly runs 121 stalls - part of the nearly 500 at its premises - that sell food under its own brand. These include dim sum, mixed rice and seafood "zi char" stalls. The other stalls are third party tenants, and revenue from their rental and management fees go to the outlet management division.

Aside from potential acquisition, Kimly also plans to expand its central kitchen to double it current output capacity, part the company's efforts to improve productivity.

"We may be kopi-boys, but we're forward thinking kopi-boys," he noted.

The directors intend to reward shareholders with dividend of no less than 50 per cent of its net profit.

Kimly: Singapore's first 'kopi-o IPO'

  • Kimly launched its initial public offering on March 8, and became the first traditional coffee shop operator to be listed in Singapore.
  • Founder Mr Lim Lee Liat is a self-professed "kopi kid" with a love for coffeeshops. When he was 24, he started his first coffeeshop venture in 1990 with several friends.
  • From inception to 2003, the group took the path to expansion, and added 25 self-managed coffee shops to their portfolio.
  • Kimly also saw a golden opportunity in the operation of air-conditioned foodcourts, and their first venture was at Ngee Ann Polytechnic in 2011 under the "Foodclique" brand. The group currently operates four more of these foodcourts.
  • They've not been averse to taking on new technology. In 2014, they implemented an automatic conveyor belt system for the returning of plates and trays at their foodcourt in SIM University.
  • In 2008, the group revealed that they had acquired a chain of dim sum stores, and there are now 43 Kimly dim sum stores across Singapore.
  • Kimly also see potential in expanding their reach via food delivery, and in November last year, partnered with food delivery provider Deliveroo.
  • Kimly's IPO put forth 173.8 million new shares at 25 cents apiece, with 3.8 million shares available for the public.
  • It had a stellar trading debut on March 20, as the stock surged to S$0.55, 120 per cent above its S$0.25 cents initial public offer price.
  • Kimly has announced plans to use the net proceeds from the IPO for acquisitions, joint ventures and general business expansion, as well as refurbishment and renovation of 64 food outlets and 121 food stalls across Singapore.

This article was first published on March 8, 2016.
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